Overview
Provides clients with control and flexibility over how wealth is distributed.
Quick facts
- For use with the Collective Investment Bond.
- Available under the Law of England and Wales and Scots Law.
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This is a trust where your client, the settlor, is included as a beneficiary. This is treated as a gift with reservation (GWR) under UK Inheritance tax (IHT) rules. Therefore, the trust is not efficient for IHT planning purposes.
- The settlor chooses their trustees. They can also appoint themselves as a trustee.
- Classes of beneficiary are defined within the trust deed; for example, ‘children and decedents of the settlor’. Beneficiaries not covered by the classes can be added to the trust by the settlor.
- The trustees use their discretion to decide who may benefit from the trust and when.
- The beneficiaries cannot demand their rights from the trustees.
Suitability
Guides and helpful documents
Trusts, inheritance tax planning, estate planning and will writing are not regulated by the Financial Conduct Authority.
Technical support
- Discretionary trust calculator - Calculate the entry, periodic and exit charges for your client’s trust.
- Trust: Who pays the tax? A brief overview of the income tax, CGT and IHT treatment of trusts.